In this Discussion, you consider a scenario in which these questions arise. Based on the scenario, you generate strategies for mitigating potential project risks.To prepare, consider the following scenario:You are on the project team for an IT project that must be completed on time to coincide with the opening of a new hospital wing that will rely in part on this technology. You learn that the project manager has been ordering shortcuts on testing to meet the deadline. You can see that these actions keep the project on schedule and the product seems to work well, but you are concerned about the additional risk caused by the shortcuts. Do you intervene?By Day 3Post a description of how you would respond to the situation described in the scenario. Identify potential risks to the project if you do or do not take action. Explain strategies you might use to mitigate the risks you identified. Is it ever beneficial to accept or increase risks in order to meet project goals? Justify your response.

HEDGING AT PORSCHE CASE DISCUSSION Please read the Hedging at Porsche case (you can buy the case packet here) and prepare for the class discussion by answering the following questions. 1. According to the case, why does Porsche hedge its foreign exchange exposure? From the perspective of Porsche’s stock market shareholders at the time of the case, does it make sense for Porsche to hedge? 2. Suppose it is the end of November 2007, and Porsche reviews its hedging strategy for the cash flows it expects to obtain from vehicle sales in North America during the calendar year 2009. The exchange rate at the end of November 2007 is $1.47/€. Assume that Porsche entertains three sales scenarios: In the baseline scenario, the expected volume of North American sales in 2009 is 32,750 vehicles. The low-sales scenario assumes that sales are 30% lower than the baseline sales volume.The high-sales scenario assumes that sales are 30% higher than the baseline sales volume. Assume, in each scenario, that the average sales price per vehicle is $90,000 and that all sales are realized at the end of November 2009 (this is a simplifying assumption). All variable costs incurred by producing and shipping each additional vehicle to be sold in North America in 2009 are billed in € and amount to €60,000 per vehicle. a) The no hedge tab in the Porsche Excel file contains a graph showing how Porsche’s operating cash flows in € (revenue − variable costs) obtained from its North American sales under the three scenarios depend on the $ per € spot exchange rate, S, prevailing at the end of November 2009. Write the equations that characterize Porsche’s North American operating cash flows in € under the three sales scenarios as a function of S, assuming that Porsche does not hedge.